Selling the Invisible: A Field Guide to Modern Marketingby Harry Beckwith
Selling the Invisible offers a step-by-step guide to selling and marketing services for business owners, sales, or marketing professionals. Explore the core problem of service marketing - service quality - what you need to improve and techniques that work. Then take steps to address service marketing fundamentals: defining what business you are in, what people are really buying, positioning your service, understanding prospects, buying behavior, and communicating with them.
“The core of service marketing is the service itself.”
Most people equate ‘marketing’ with simply selling or advertising goods and services. This focus on the outside world will distract your company from the inside and from the first rule of service marketing: The core success factor of service marketing is the quality of the service itself.
Service quality, in general, has dropped to an all-time low, partly because companies cannot show that investments to improve service (via training or staff increases, for example) lead to increased revenue.
Overestimating yourself or your service delivery standards is a common human trait. If you rate your service highly when it is only average, you will miss out on the opportunity to improve. You should focus on developing a service that exceeds client expectations and allows your clients to set your quality standards rather than your ego or industry. Clients will have experienced world-class service at some point, so improving service standards will ensure you meet their rising expectations.
In the service industry, tiny efforts can often have a huge effect on business success. Taking ownership of a complaint and resolving this so that the customer feels like they matter offers big opportunities.
Focusing only on exceptional customer service can also be a detriment. If you don’t improve systems or offer competitive pricing and convey this via engaging advertising and marketing activities, you may fall behind your competitors. Service is at the heart of service marketing, but marketing is the brain of service marketing.
Successful companies try to do things differently rather than try to be slightly better than their competitors. McDonald’s did more than refine the classic American drive-in by adopting a process-driven approach to delivering good quality, fast food at great speed and low price.
If your industry has great margins and an enterprising company enters your market, you will be in trouble. Failure to innovate can be costly to your service business. The first rule of marketing planning is to always start at zero. Don’t assume your company is in the right business, structured for success, or has the right staff.
There are three core stages in the evolution of an industry:
Product-driven – Create a product that meets the acceptable minimum standards of buyers and is desired due to its unique benefits.
Market-driven – Differentiate the core product from competitors who have now entered the market.
Imagination-driven – Surprising the customer by delivering beyond what customers are expecting.
Most services remain in stage two. However, every service company should look to stage three as their goal, as this is where glory, fame, and market share lie.
Actions to take
Surveying & Research: Even Your Best Friends Won’t Tell You
“People won’t tell you what you’re doing wrong. Your prospects won’t tell you. Clients won’t tell you. Sometimes, even your spouse won’t tell you.”
Conducting client surveys is a key tool to improving your service. The problem is that people won’t tell you what you are doing wrong, but they will talk behind your back! The best way to survey clients is to use an independent third party to manage this process. They can assure clients' details remain confidential, and in turn, clients will provide more candid answers.
Customers will appreciate that you are trying to improve your service by asking for their opinion. This process also allows you to flag potential issues, learn from your mistakes and respond to changing business demands.
Should you conduct written surveys or interviews? Written surveys can be problematic as the questions and answers can be interpreted differently by the surveyor and the client. For example, if the surveyor asks the client to rank the importance of different service characteristics, quality may come out the highest.
But what does ‘quality’ mean to the client? Is this due to product quality, functionality, or customer service? Telephone surveys produce more revealing results as people tend to open up more in a conversation and provide the information they need. It’s physically easier to talk than to write, and a person’s voice conveys their thoughts and feelings better than written words, which can often be obscure.
The one question you should never ask is ‘What don’t you like about the company or service?’ Asking someone to admit they made a bad decision in choosing a company is not a good idea. Focus groups are another misconception. You may think that a focus group can help you zero in on the perfect market research quickly, but you are selling to individuals, not groups. Focus groups are more about group dynamics than market dynamics, with dominant personalities tending to take over the conversation and people’s views impacting others.
Actions to take
Marketing Is Not a Department
“More than half of all Japanese companies do not even bother to have marketing departments, because they believe that everyone in the company is part of the marketing.”
Your business can have excellent service, top-performing sales teams, superior customer service, award-winning sales collateral, but still, have one major problem. You may consider that sales and marketing should just be left to the sales and marketing teams. This is a problem because everyone in your company should be responsible for marketing. If one person in the company delivers a poor customer experience, then the buyer will not return. They are also likely to tell all their friends not to use your service.
Tunnel vision or marketing myopia is a common problem in many companies. The inability of people to see the broad scope of their business and the wider world in which it operates is a key issue. Many companies just focus on their specific problems as this is what they know about their company. What is most important is to learn about your customers and prospects to take the business forward.
Every act is a marketing act upon which success depends. The fastest, cheapest, and best way to market your service is through your employees. Another key area of focus is to look at what you are good at and expand your services to include other areas. An advertising agency is good at advertising, but they could expand into PR, sales promotion, presentation consulting, for example.
Competitive strategy is a key component of a marketing plan. In the service industry, your prospect faces three options–use your service, do it themselves or not do it at all. Your biggest competitors can actually be your prospects! The advice ‘Go where they aren’t’ is also good to bear in mind. If you can go where no competitor would dream of and dominate (set up in smaller cities or market yourself as a specialist in a niche area), then you can win business without a fight!
Technology can also greatly benefit your service business. Every service company should have a Director of Technology who can advise on new technologies that provide a competitive edge. Make technology a key point of your marketing plan.
Actions to take
Planning: The Eighteen Fallacies
“The three cornerstones of planning - predicting the future, seeing what you want your future to look like, and devising ways to make sure your future comes out that way—are shaky from the start.”
There are 18 key fallacies people tend to believe in:
#1: You Can Know What’s Ahead
People can’t predict the future.
#2: You Can Know What You Want
Even if you equip a group of smart people with relevant data, don’t assume they will come up with a great idea. The greatest value of the plan is the process (the thinking that went into it) rather than the end result of the plan itself. Plan your people, not your future. Outstanding people who fit your basic broad vision will tend to make the right decisions.
#3: Strategy Is King
Successful companies use tactics to drive strategy rather than letting strategy lead the way. These companies try something out and learn from it, then employ different tactics to evolve their strategy.
#4: Build a Better Mousetrap
Ideas don’t sell themselves. If you launch your idea without passion, others will think you lack confidence in the idea, leading to them losing confidence as well.
#5: There’ll Be a Perfect Time
. The problem with endless analysis and waiting is that competitors will quickly catch up, so you will miss your moment.
#6: Patience Is a Virtue
An active company will grow and succeed, whereas dormant organizations will remain inactive and fail. By the time the consequences of this inactivity are realized, it is often too late, with many action-oriented people having likely left the company.
#7: Think Smart
Lateral ideas do not follow a straight line, and therefore they can often be viewed as being a bit ludicrous. However, these ideas often turn out to be the best most of the time. Planning tends to attract intelligent people, but they can be the first to squash good ideas due to their strong conviction and logical approach.
#8: The Fallacy of Science & Data
Research has the connotation of something scientific, and people give weight to a highly quantified statement. ‘Five out of six people chose our product’ will sound much better than ‘Most people choose our product.’ However, there are no rigorous sciences of human behavior, and social sciences tend to consist of well-supported, general observations. Planning is not a precise science, and trusting the facts can be risky if they are totally inaccurate and misleading.
#9: The Fallacy of Focus Groups
Brainstorming is a process where ideas are bounced back and forward between at least two people. Focus groups can brainstorm new ideas to see if these benefit service marketing, but you cannot rely on them solely.
#10: The Fallacy of Memory
Memories can deceive us as we can look back and remember things incorrectly. In planning, you need to be careful of what you think you remember versus what actually happened, as this can cloud your judgment.
#11: The Fallacy of Experience
If you infer things from previous experience, you may tend to overgeneralize, so it is good to have a healthy distrust of what past experiences have taught you.
#12: The Fallacy of Confidence
Every company has sacred truths that can eventually become a company-wide dogma, for example, ‘Our customers buy on price’ or ‘Telemarketing doesn’t work for this audience.’ Many of these so-called truths are false.
#13: Perfection is Perfection
Seeking perfection in the planning process can be problematic as you can get stalled by your desire for excellence.
#14: Failure is Failure
If you are doing anything worthwhile at all, you will suffer a dozen failures before you succeed.
#15: The Fallacy of Expertise
An expert can offer informed opinions, but you shouldn’t look to experts for all the answers. Every experience in life is unique, so we cannot always apply the lessons of one experience to another.
#16: The Fallacy of Authority
Many organizations believe that ideas follow the power rather than the good thinking in the organization. However, those with power aren’t necessarily the best decision-makers and can often kill ideas.
#17: The Fallacy of Common Sense
Marketing planning has a finite number of strategies, including creating a distinction, leading on price, or securing an untapped niche. Then, you need to figure out how to execute strategy, be unique, fill a niche, convert prospects, and essentially how to succeed. These options are infinite and, as such common sense has little relevance.
#18: The Fallacy of Fate
Believing in yourself, your people and your organization are critical to marketing planning success.
Actions to take
Anchors, Warts & American Express: How Prospects Think
“Here’s a good question: Why do people buy what they buy?”
Service marketers assume that buying decisions are logical. Prospects will compare the cost and benefits of different services and choose the one with the best score. The case of Visa versus American Express suggests otherwise.
Visa offered more benefits and lower costs than American Express, making Visa the more rational choice. However, over 25 million people chose American Express because of the prestige and privilege of membership. Therefore, it is important to avoid only trying to appeal to a prospect’s reasoning.
Prospects also rely on familiarity when making decisions. If prospects hear more about you via regular advertising, for example, they are likely to choose your company over others.
Evidence shows that even being known negatively enhances familiarity due to a human trait called attribute forgetting. If you hear a negative review of a company, over time, you tend to forget the negative information (attributes) and remember only the company name.
Familiarity is, therefore, a very powerful thing. This also relates to risk, in that when choosing a service, prospects will choose a known service over other unknown service options. Essentially, they will not select the service they want the most, but they fear the least to avoid a bad experience.
What do you do if a competitor is more familiar with your prospect than you are? The best approach is to take advantage of another bias people have: the Recency Effect. Companies that present competitive pitches apply the Recency Effect with success. They ensure that they are the last company to be present, then deliver a powerful and well-conceived follow-up to grab the business.
Human decision-making dictates that people do not look to make a superior choice when choosing a supplier. They just want to avoid making a bad choice.
Prospects do not only form first impressions; they become anchored to them. This is known as the Anchoring Principle. Today, most people have little time and make first impressions as snap judgments, then use this as a basis for later decisions.
The smart marketer needs to be aware that first impressions are critical, take hold quickly, and are tied to your success. Further, last impressions are just as important as first impressions. Advertisers recognize the power of this by paying premium prices for adverts at the front and back of magazines.
The more alike your service is to other services, the more important difference becomes. Meaningful differences can be difficult to find; prospects will look for more trivial differences. This could include the décor in reception, the style of the business card, or the quality of the brochure. Showing your weaknesses (or warts!) can also strengthen your position against competitors. A key to selling a service is to represent yourself as honest and trustworthy.
Actions to take
The More You Say, The Less People Hear: Positioning & Focus
“Successful marketing starts with positioning.”
There are four essentials of positioning. Firstly, you must position yourself in your prospect’s mind. Secondly, your position must be singular and have one simple message. Thirdly, your position needs to set you apart from competitors. Finally, you must sacrifice. You cannot be all things to all people, so you must focus on one thing.
Service marketers are reluctant to sacrifice opportunities by standing for one thing, but a narrow and more specialized focus can create opportunities and broaden your appeal to clients. For example, if a law firm handles a specialized and complex area of law amongst other areas, they will be regarded as capable of almost anything. This ‘lesser logic’ power can appeal to clients with less complex issues, in the sense of ‘If they can do something that hard, then they can easily do this by lesser logic.’
Positioning does not limit your appeal to clients due to the fact that people associate. For example, we tend to think that attractive people are smarter, friendlier, more honest, and more reliable than less attractive people. This is known as the Halo Effect, where people are programmed to associate one positive thing with many good things. In terms of marketing your service, if you focus on saying one positive thing in your advertising, you will become associated with many other positive things.
Don’t assume that every service is the same in your positioning exercise. Services have unique components: people! They will also not be the same in terms of the work they inspire, the information and training they provide, how they grow, and their efficiency.
Prospects perceive services differently, too. When they enter your place of business, they will get a sense of your service from the décor, atmosphere, and people. Identifying and communicating your unique differences and creating new ones leads to success in service marketing.
Your position in the market is determined by your prospects, who take what they know about your company and position you accordingly. You need to focus your efforts on influencing your message and using your existing position to your benefit. Avis Rental, who lagged behind Hertz for years, used the tagline ‘We’re Number Two, we try harder’ in their advertising, and sales soared. A perfect example of making the most of your position.
Before creating your positioning statement, it is important to distinguish between a position and a positioning statement. A position (statement of position) is a no-nonsense statement of how you are perceived in the minds of prospects, so it is your position.
The positioning statement is how you wish to be perceived and the core message you want to deliver to influence perceptions of your service. Start by creating your position, a truthful account of your service company from the perspective of prospects, clients, and yourself. Then create your positioning statement of how you want to be perceived.
This problem sometimes arises when SMEs pitch themselves as the ‘premier provider,’ and few prospects will believe this huge jump. In positioning, you must take small steps rather than a huge leap. This huge leap shouldn’t be dismissed, though, as this is likely your longer-term goal and will guide your mission statement. You should create bold dreams but realistic positioning statements.
Lack of focus in your service company can lead to plummeting sales and profits. If you try a little of this and a little of that, so even your prospects cannot describe your position, you will not have a position.
The same principle extends to marketing campaigns. A focused theme will be far more successful than mixed messages. Positioning and focus will result in your marketing communications and the people that create them working as one. A clear position and focus get everyone on the same page. Your employees will know what to emphasize, and your prospects will see a common theme and learn exactly who you are.
Actions to take
Ugly Cats, Boat Shoes & Overpriced Jewellery: Pricing
“Some people think pricing is one of the more logical acts of marketing. These examples say something different.”
Don’t assume that logical pricing is smart pricing. A lady in Denver wanted to sell four cute cats, so she advertised ‘Ugly Cats. $100 each. 555-5555.’ Over 80 people called, and she could have sold the cats for much more. Timberland priced its classic boat shoe over the market leader, and sales boomed. A jewelry store in Arizona was struggling to sell despite peak tourist season. A salesperson misread a note to ‘x ½’ the price as ‘x 2” and doubled the price. All the jewelry sold out.
If no one complains about your price, it is too low. If almost everyone complains, then it is too high. How much resistance tells you that your price is right? 15 to 20 percent.
Approximately 10% of people will complain about any price. Some are looking for a great deal, others are mistrustful and assume prices are overstated, and some will have a set price/budget in mind. Throw out this group who object to any price and look at the rest of the resistance cases. Resistance in 10 percent of those cases – making a total of 20% - is about right. If this exceeds 25%, then you need to scale back.
The Problem of the Deadly Middle is another issue with this pricing strategy. The high-priced provider is assumed to offer the best quality, and the low-cost provider delivers an acceptable product at the lowest cost. If you price in the middle, you are saying you are not the best, neither is your price, but your service and price are pretty good. This is not a compelling message, and by placing yourself between the premium and low-cost providers, you end up competing with everyone.
Don’t fall into the low-cost provider trap either. The position is clear, and so is the price at the lowest a prospect can find, but this can kill your service business. Cutting costs requires little imagination, so it is an easy market niche to enter.
Cost shaving with suppliers only works over the short term, and employees can view this austere work environment as uninspiring. Research in the Harvard Business Review showed that when comparing companies that are different from those that compete on cost, the differentiators won every time. There is nothing unique about pricing, and people can always find a cheaper way to get your service.
Value is not a competitive position as this is what every service offers and is fundamental to survival. The service price must fairly reflect its value to the customer. For example, legal services for an uncontested divorce could be $50 per hour. But a lawyer who represents multinationals successfully in high-profile court cases could charge $750 per hour – both clients think they offer great value. In services, value is given and not a competitive position.
Actions to take
Monogram Your Shirts, Not Your Company: Naming & Branding
“ADP, DMM, ETI, ADC, APC, ABC, CBC, BCW - Which “name” did you remember? None?”
Giving your service a name and getting it right is important. Distinctive names are more likely to be remembered, and they also follow the basic principle of marketing: differentiation. A distinctive name implies a distinctive service, which is just the impression a service should make.
Using your own name is one way to be distinctive. You become a walking advertisement by naming your business after yourself, and if your popularity rises, you may even reach celebrity status!
When choosing a name, try to avoid monograms, clever/wittily named services, generic or predictable names. This results in your name being less memorable, unappealing, and making you look uncreative.
Many Fortune 500 companies pay six-figure amounts for a distinctive name because names make a company’s first impression.
In service marketing, almost nothing beats a brand. Prospects view a brand as a warranty: a promise that the service will live up to its promises and perform. Few services have warranties as it can be difficult to warrant the service industry, so the client only has the brand to depend on.
The heart of the brand is the integrity of the company and its employees. You need to win the confidence of clients by keeping your promises and building a team with integrity to ensure the service’s long-term success.
Most of the great brand names are ‘unconfusable’ – people associate these brand names with the company behind them. Sony, Rolls Royce, Coca-Cola, Honda are some examples. This also means no bad associations are developed via connection to another company with the same name. People quickly make connotations, so choosing a unique brand name is wise to speed up brand building.
Brands have three dramatic effects on selling:
Word of mouth recommendations – Spread easier and further for branded services over unbranded services where people tend to forget the company name.
Sale conversions – Brands singlehandedly convert more inquiries to clients as prospects feel more comfortable and trust a known brand.
Quicker selling process – Typically, prospective clients need to complete follow-up presentations and meetings to secure buy-in for a nonbranded service.
Small service businesses can build a brand via creative approaches and minimal costs - it’s not just for the big companies. Building your brand doesn’t take millions; you just need imagination.
Actions to take
How to Save $500K: Communicating & Selling
“Because services are intangible, marketing communications for services do more than promote services.”
Communications make services more tangible and provide prospects with something to evaluate. This is pretty straightforward in terms of selling a product, but people are far less trusting and certain about most services. Your focus needs to be on making the service visible and making prospects comfortable.
Prospects have a finite amount of attention due to the million different things competing for their attention, so you need to give them powerful reasons to listen to you. Focus on your prospects' needs and how you can meet these requirements. Try to deliver one clear message as people cannot process multiple messages.
The Cocktail Party Phenomenon illustrates this well: you are listening to someone at a party, then someone mentions your name in a nearby conversation, and you can only hear that conversation now, not the one you are engaged in. Essentially your prospects have one key question – What makes you so different that I should do business with you? Answer this question with one good reason why they should buy from you instead of someone else!
Consider the following Dos and Don’ts of marketing communications:
Do tell stories to make your presentations more interesting, personal, credible, and persuasive - leading to effective marketing communications.
Do prepare communications in clear, readable writing, be specific and not abstract, and use vivid and familiar examples to make your point.
Do create evidence of your great service quality from customer satisfaction surveys and communicate this to your prospects.
Do repeat your core marketing messages as much as possible, like a catchy song; it will stick in your prospects' minds.
Do attack the stereotype of your service business that prospects often have: Accountants are humorless, Collection agencies are bullies etc.
Don’t use tricks, gimmicks or cliches as it tells your prospects you are willing to trick them. It looks unprofessional and cliches won’t impress your clients.
Don’t focus on excessive hype in your advertising. Deliver understated and unusual marketing communications – far better to say too little than too much.
Don’t institutionalize your service company. Personalize it by meeting with clients face-to-face – prospects need to see you to decide about you.
Don’t create confusing communications. If you are selling a complex service, simplify the concept with a metaphor.
Don’t spend $500K on sales brochures that do not look the same and have different messages. Repeat yourself visually too to look more organized and consistent.
Our competitive culture feeds the desire to be Number One and ‘the best.’ This does have its rewards, but it is not a necessary marketing position. When service clients are asked ‘What is the main reason you use this company?’ the most common answer (even from clients of superior services) is ‘I just feel comfortable with them.’ You can accomplish just as much by convincing a prospect that your service is ‘positively good.’
People hear what they see! Prospects cannot see your service, so they judge your service by what they see. Look at your business card, reception area, advertising and consider what your visible say about the invisible thing you sell. Visual symbols of service are important in this context. Think how insurance companies use visual metaphors to describe their companies: Prudential has the Rock of Gibraltar, Allstate has Good Hands, Travelers has an umbrella.
Mission statements have value, but they do not belong in marketing communications. Mission statements tell people your strategic goals, so while they are great for your employees and stakeholders, you do not really want to alert competitors of this information.
Actions to take
Holding On to What You’ve Got: Nurturing & Keeping Clients
“The jilted agency president says he is “shocked.” “We were doing excellent work at Smith & Smith. The client told us she was happy. This is a total surprise.”
Service providers need to pay careful attention to their service relationships. From the moment you secure the business, you are in deficit as the client has assumed the risk in terms of buying the service not yet delivered.
While service delivery is in progress, and if mistakes are made along the way, this further increases the deficit in the client’s favor. Clients tend to bury grievances rather than air them, so you may not realize the relationship is worsening, but you need to keep an eye on this and address any issues.
If you make a client think you can provide a better service than you actually can, they will end up disappointed. This will lead to negative referrals. Customer satisfaction is measured in terms of the gap between what the client expects and what they get – the bigger the gap, the greater the dissatisfaction.
Hype is one of the worst marketing weapons in this respect because it can raise expectations to extreme heights that can never be achieved. Your patrons are saints, so you need to recognize them accordingly. Keep in contact, be warm and grateful as this will be appreciated more than you realize.
One central fact of service marketing is that it is much easier to fail in service than succeed. Trust takes time, and it can be difficult to build this in a couple of meetings or lunch appointments. Tackle this problem by advertising your successes in terms of delivering ahead of the deadline, under budget, or any special achievements.
Unlike products that you buy that reinforce your satisfaction every time you look at them, services come and go. Given these significant differences between typical product and service buyers and their satisfaction levels, what should a service marketer do to create a satisfied client? Leverage advertising and publicity to remind clients of the great service you provided and let them know you are still around. Out of sight is out of mind!
Actions to take
“So often, and more often than we imagine, that is the difference in a sale. Not superior knowledge. Not superior talent or years of experience. Just something tiny. Like a short thoughtful letter.”
Managing tiny things can make the difference between winning or losing a sale. Prospects who are comparing services before awarding a contract may consider each company skilled enough to complete their project, but a tiny gesture can sometimes swing the deal in your favor. Consider improving your reception service, so clients are fielded quickly to the right person, deliver ahead of schedule and focus on making clients happy.
Failure to create or identify a distinction in your service is critical in making a selling message powerful and empowering your sales team. If salespeople don’t believe in the service, then they will not communicate this effectively in a presentation. The key to any pitch is to have a clear point of view. If your firm has not created or clearly identified a distinction and its benefits to the people that use the service, then the sales team is likely to fail. To fix your messengers, you need to fix the message first.
Most businesspeople equate the word ‘risk’ with ‘money.’ This is partly correct, but many risks people fail to take cost nothing – this is known as personal risk. Selling a service involves personal risks. You will be rejected, you may be labeled as pushy, people will ignore you, and you may feel bad at the end of the day. However, the rewards for taking these personal risks will be well worth the effort.
People don’t want to spend days making decisions. They have little time, and books like the Overworked American suggest that they have less time every year. People meet you, they like you, and then they hire you—many people in business move fast. Follow the Collision Principle: “Get out there, almost anywhere and let opportunity hit you.”
Actions to take
“To succeed spectacularly in a service business, you must get all your ducks in a row. Marketing is just one duck.”
More and better marketing is not the answer to every business question. McDonald’s is recognized for its marketing brilliance, but without a brilliant real estate strategy, it would have probably fallen into bankruptcy (this strategy equates to $8.8BN in book value). Core departments within a service company all play a role in success, which is why you must get your ducks in a row. Marketing is just one duck, but it is a very big duck!
Service quality is a major deal, but much of service quality is invisible to the client. Marketing aims to attract and keep business, so in this respect, a service is only what prospects and clients perceive it to be. If we stay at a hotel, for example, we know our room has been spotlessly cleaned but that perception is not because the room is actually spotless. This is gained from the glasses wrapped in plastic and the toilet seat with sanitized wrap. These are symbols that tell us this room is clean. Therefore, this is not the hotel’s service quality, rather the merchandising of its quality.
Methods of choosing a service can be difficult to predict and often don’t fall into intelligent,cost-benefit-focused behavior. You cannot expect to seize a market by creating a superior service with a high benefit-to-cost ratio.
Services are human, and their success depends on relationships between people. People can be frustrating, irrational, and unpredictable, but you can spot some patterns in people. The more you can use these patterns to understand people better, the more you will succeed.